Regulation 5 Supplementary provisionsI1

The capital ratio limit is 125% of the group tier one capital ratio of the CFC’s UK banking group for its last regulatory return period ending before the beginning of the relevant accounting period.

The group tier one capital ratio of a UK banking group for a regulatory return period is to be calculated using the following formula—

$$100\%\times \raisebox{1ex}{$A$}\!\left/ \!\raisebox{-1ex}{$B$}\right.$$

where—

1. (a)

   A is the total tier one capital of the group for the regulatory return period or, if different, the amount calculated in the same way but using amounts (calculated in accordance with BIPRU 11) shown in the group consolidated accounts (if any) for the same period, and

2. (b)

   B is the total risk weighted assets of the group for the regulatory return period or, if different, the amount calculated in the same way but using amounts (calculated in accordance with BIPRU 11) shown in the group consolidated accounts (if any) for the same period.

A CFC’s tier one capital ratio at a time is to be calculated using the following formula—

$$100\%\times \raisebox{1ex}{$C$}\!\left/ \!\raisebox{-1ex}{$D$}\right.$$

where—

1. (a)

   C is the net total tier one capital of the CFC at that time, and

2. (b)

   D is the aggregate of the risk weighted exposure amounts of the CFC for all its exposures at that time.

In the formula in paragraph (3), C and D are to be determined on the assumptions that BIPRU 11 applies to the CFC and that the CFC is required by those rules to make a disclosure of financial information other than as part of a group regulatory return.